Companies cautiously seek to increase IT staff with network, security and business skills.

John Halamka, CIO of Harvard Medical School and CareGroup Healthcare System in Boston, has an aggressive project on his plate this year: He's wireless-enabling all 2 million square feet of his enterprise campuses. To do it, he's increasing his IT staff of 200 by five positions, which require network, wireless or security expertise.

The wireless network will play a variety of roles, from carrying sensitive patient data to giving patients and their families a link to the Internet to moving VoIP packets to supporting RFID .

"If you're going to run all four of these modalities over a wireless network, each of which has a different security profile, you're going to need some people to manage the rollout of that network, the day to day operations, the security configurations," Halamka says.

It's people Halamka currently doesn't have in-house. Lucky for him, his budget is increasing 2% this year, which gives him the $500,000 or so he needs to fill the new positions.

Halamka is not alone. After several years of budget cutbacks, the technology industry once again is expecting budget growth in 2005. Analyst firms predict tech spending will rise in the mid-single digits. IDC pegs growth at about 6%, or $60 billion.

Along with that growth comes hiring. While IT managers remain cautious when it comes to full-time staffing, analysts say an uptick in budgets, coupled with a slow return to project rollouts - such as Halamka's wireless effort - and the enforcement of government regulations such as the Health Insurance Portability and Accountability Act and Sarbanes-Oxley will result in a slight jump in the number of IT positions created this year.

"We're continuing to see improvement in the market," says Katherine Spencer Lee, executive director of IT staffing firm Robert Half Technology (RHT). "It's not yet what it was in the dot-com boom, but it's certainly marked improvement."

Indeed, RHT's survey of more than 1,400 CIOs last year found that 11% of the executives polled planned to add IT staff early in 2005, compared with 9% who planned additions in 2004. While 2% of the CIOs anticipate cutbacks this year, that's fewer than the 6% who planned cuts a year earlier. Eighty-six percent of the respondents expected to neither add nor cut positions in 2005, and 1% said they didn't know yet what their hiring plans would be for this year.

Business expansion is the main driver of IT hiring, and network expertise is the most in-demand specialty, according to RHT. At the same time, Windows and Cisco network administration continue to be hot skills, while expertise in security, storage , VoIP and Web services are also at the top of IT hiring managers' lists.

With the rush of mergers and acquisitions already starting, analysts say expertise in integration will be important. Business intelligence, messaging, Linux and open source, wireless and CRM skills also will be in high demand.

Premium pay

David Foote, president and chief research officer for Foote Partners, says one interesting trend he's seeing is an upturn in pay for network, collaboration and application development skills. Pay for those areas was declining as much as 12% last year.

Part of the reason is that companies are finding that offshore outsourcing carries more risks than they'd like, and they're putting more value into the resources they have in-house, Foote says.

"There no doubt have been disappointments in offshore outsourcing," he says. "It may be cheaper, but it's not foolproof, and companies have reassessed what should be outsourced and what should not. . . . Companies realized they need to adjust pay accordingly to retain their best people."

Pay for areas such areas as security and Linux, which were red-hot last year, is starting to cool because there are now more people available who possess those skills.

It's clear that demand is still there: At The Pennsylvania State University, the hunt is on for people with Linux or Unix skills.

"Our internal direction is to move whatever we can from Windows servers to Linux on the mainframe," says Robert O'Connor, IS manager at the university in State College, Pa.

As a result, O'Connor, who heads up the university's administrative information services division, says he added one employee with Unix skills in December and this year plans to add two more with either Linux or Unix skills to his staff of about 130.

But having isolated technical expertise is not enough. Across the board, analysts and hiring managers stress the importance of being able to apply technical knowledge in the business world.

GM isn't planning to add staff in the U.S., but might fill out in areas globally where the business is expanding, Tipton says. In the U.S., hiring primarily will be to fill vacated positions.

"The kind of people we look for are those who can help us integrate across business processes," Tipton says. "People who can play in both worlds. People who understand technology, but who also understand business process and how to make them work together - going beyond a siloed view into looking at how business processes need to work together to make something happen in the company."

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